Business and FDI Opportunities in Bahrain

Over the years, Bahrain has emerged as an investment hub with continuous FDI inflows. In 2016, around 40 foreign companies made investments in Bahrain, amounting to US$ 282 million of FDI inflows.

Country Overview

Bahrain, officially known as the Kingdom of Bahrain, is a high-income country situated in the Persian Gulf near Saudi Arabia and Qatar. The archipelago consists of 33 islands and has a population of around 1.4 million. Bahrain was the first country in the Gulf region to discover crude oil, though it did not reach the level of prosperity enjoyed by some of it neighbours. This has led the country to diversify its economy and develop several successful industries such as petroleum processing and refining, aluminium production, banking, hospitality and retail.

Over the years, Bahrain has emerged as an investment hub with continuous FDI inflows. In 2016, around 40 foreign companies made investments in Bahrain, amounting to US$ 282 million of FDI inflows. Tourism accounted for the majority of these investments, followed by manufacturing, logistics and financial services.

Why Invest in Bahrain

Bahrain acts as a gateway to the Middle East owing to its strategic geographical location which provides easy access to the rest of the countries in the region. The Kingdom remains an attractive investment destination on account of its open business ecosystem and supportive visa policies. The Government of Bahrain is also taking measures to attract foreign investors. It has introduced a number of policies and regulations to create an open, transparent and favourable business environment. In comparison to other GCC countries, Bahrain maintains the lowest basic costs as well as corporate and personal taxes. The country also permits 100% foreign-ownership in around 95% of all the industries and sectors, eliminating the need for a local partner.

The country also boasts of a highly educated and skilled workforce, with 90% of the ICT workforce fluent in both Arabic and English. Bahrain also has a well-developed logistics infrastructure and connections to its neighbouring countries of Saudi Arabia and Qatar.

Where to Invest

Bahrain offers investment opportunities in a large number of sectors with some of the most popular being:

Tourism and leisure: Bahrain receives millions of tourists annually, both from the other GCC countries as well as the rest of the world. The island nation offers some of the best tourist destinations in confluence with a relaxed way of life; rich history and culture; delicious cuisine and endless shopping. The tourism market in Bahrain is expanding rapidly, and holds opportunities in many different areas, such as tourism real estate and leisure activities services.

Logistics: Bahrain offers abundant opportunities to set up a cost-effective distribution base. It has the lowest setup and operating costs for a logistics business in the GCC; lower port charges; subsidies and training grants for employees; and lower cost of living. The country also offers unparalleled and efficient access to the largest regional customer-base.

Manufacturing: Bahrain is the only country in the GCC which offers 100% foreign ownership in manufacturing and distribution without free-zone restrictions. It has no corporate or personal income taxes and provides cheap industrial land lease rates with no additional fees or service charges. Manufacturing, raw materials importing, plant machinery and spare parts are also exempted from paying 5% customs duty. The country has duty free access to all the 14 Arab countries, the United States, Norway, Singapore, Switzerland, Lichtenstein and Iceland.

Financial services: From banking and asset wealth management, to FinTech, insurance and Islamic finance, Bahrain offers opportunities across all major aspects of financial services. The country has more than 40 years of experience in this sector, representing the longest established financial sector in the GCC. Moreover, doing business in Bahrain costs approx. 30% lower than Qatar and Dubai.

Information and Communications Technology (ICT): Despite being small, Bahrain’s market hosts a range of IT companies operating within areas such as services, distribution, consultancy, software development, customer support, etc. The country is ranked the first in MENA for ICT readiness and offers the most competitive and affordable ICT services in the region. It also provides various other benefits including a robust ICT infrastructure, the availability of skilled human capital, a cost competitive location and various office setup options.

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